An Opinionated Perspective on Custom Manufacturing in America

By Greg Williams - July 2009

Fool's Law Alert - Cap and Trade: The Demise of Small Custom Manufacturing in the American Wood Products Industry.

I usually don't get political on this website but the pending Waxman-Markey cap-and-trade law, known as A.C.E.S. (the American Clean Energy and Security Act), holds the potential to decimate the small custom manufacturing segment of the wood products industry. I'm not exaggerating.

The cabinetmaking and woodworking sector of wood products has already been beaten up by imports and the current recession. What used to be a thriving traditional industry with a majority of shops with 1-25 employees has already contracted by an alarming percentage in the last 2 years. But the core identity of the industry; the proud spirit of American made custom manufacturing has largely survived due to ingenuity and hard work, and things are starting to look up a bit in terms of overall business. That could all change drastically with the passage of this single law, and in ways from which there will be no recovery for small custom shops.

The reason I can say this is simple: wood products gets hit by this bill from all directions but is one of the industries that does not get built in support to help it recover from the damage.  

According to it's own figures, the government forecasts that cap and trade would reduce the primary wood products industry by huge margins. Primary wood products encompasses everything from logging, sawmills and planing mills, manufacturing veneer and plywood, treating wood products, etc. This industry is already struggling due to excessive regulation and imports.

Business in general takes a major hit in terms of increased energy costs and production killing regulations, but many mainstream industries such a banking, electric utilities, steel manufacturing and big unionized industries have successfully lobbied for major, almost luxurious concessions and support programs to be "built in" to the cap and trade policies that will affect them.

Like the primary wood products industry, the manufacturing sectors that will be hit hardest without a "cushion plan" built into the bill are many of the ones that supply the custom wood products industry and the construction industry with materials, parts and chemicals.

What this all means for the cabinetmaker and woodworker is that your business along with both your supply chain and your revenue source will get hit with substantial cost increases for energy and reduced production due to increased regulation. But that's only part of the damage.

The bill requires the EPA to establish environmental standards for residences, meaning a federally dictated one-size-fits-all policy for regulating every home in America. The bill would affect commercial properties, too. In fact, all buildings would be governed by a “national energy efficiency building code” that would require 50 percent reductions in energy use in all buildings by 2018, followed by 5 percent reductions in energy use every three years after that through 2030.

The costs will be staggering and directly impact the sectors of business that are struggling the most, like the construction and housing industries. But every industry will be effected. The bill also calls on the EPA to establish a federal greenhouse-gas registry. All businesses would be required to collect and submit data on their carbon footprint to the EPA, creating yet another compliance cost for them to pass on to their customers and opening the door for future EPA fees and regulations.

Enforcing all of this regulation will be accomplished by a huge number of government operated programs and initiatives. Projects receiving grants and financing under Waxman-Markey provisions will be forced to use businesses and contractors that meet qualifications based on very political sets of rules, screened by a myriad of new government agencies, processed by special interest grant writers and allocated to a limited demographic of business profiles thereby restricting competition and ensuring that these projects pay out inflated union wages. And it’s not just the big government project contracts that are effected this time, since Waxman-Markey forces certain criteria and union-wage rules all the way down to the light-bulb-changing level in any publicly subsidized project.

Perhaps the most disturbing aspect of this whole mess is that Waxman-Markey will not reduce greenhouse-gas emissions, at least not at any point in the near future. The inclusion of carbon offsets or free open credits, which are currently being made up out of thin air and passed out to big business in exact ratio to dollars spent in lobbying efforts by the recipients, will eliminate most of the actual reductions to greenhouse gas emissions for the next 50 years - though in doing so it will manage to drive up the prices businesses and consumers pay for every product that requires energy for its manufacture — which includes basically everything. 

And you may be asking how could this all be true? That's the reason I call it the Fool's Law. This bill depends on the the continued foolish ambivalence and inattention of politicians and the general public in order to become law. If people truly examine this legislation it is clear that the Waxman-Markey bill in practical application would accomplish the most invasive and comprehensive set of direct government controls over our lives and small businesses in the history of this nation; and all for the purpose of political destiny and control more than any other cause.

It contains a free give-away of billions in cash and mandated revenue to the industries with huge lobby efforts and special interest groups like never seen before. And most of the people who voted for it in the House of Representatives never read the bill, they just reacted to political pressure.

In short, this bill makes the previous stimulus spending and bail-outs look like peanuts because the massive complex of new agencies and laws created by this bill will permanently change the economy and political power structure of this nation.

I hope you understand that last sentence clearly.

This is not just some law that can be repealed by a future President or Congress if we don't like it. It is so far reaching in scope and creates broad powers for so many government agencies  that it represents a fundamental change to politics, our economy and business practices forever.

Look, I'm all for responsible laws to address climate change and promote environmental stewardship. The wood products industry has embraced the green initiatives available and shown true leadership in this area. But this isn't about the environment, it's about power and socio-political engineering.

Please find out more for yourself and take the time to contact your Senator about this bill now before it is rammed through Congress and becomes law.

Find out more in this article from the Wall Street Journal:

http://online.wsj.com/article/SB123655590609066021.html

Find your Senator here:

http://www.senate.gov/general/contact_information/senators_cfm.cfm

Learn the facts not available in mainstream media:

Read this report from the Independent Heartland Institute:

Visit the website here: http://www.heartland.org/about/
 

Other Links:

Europe's Cap-And-Trade Scheme A Cautionary Tale For The U.S.

Waxman Markey Cap and Trade's Biggest Losers: Wood Products

Federal Bill Largely Ignores Importance of Wood Biomass

50 reasons to Stop Waxman-Markey

Comments or feedback? Click here to email 1Goal.net.

All rights reserved - 1 Goal, Inc. DBA: 1Goal Technology Solutions - 2006